Bonus Depreciation Makes Comeback?
Bonus depreciation could be making a comeback for business aircraft buyers and NBAA is encouraging lawmakers to make it happen. The Senate Finance Committee last week drafted legislation that would restore a series of tax incentives for two years, including bonus depreciation on capital assets. Under bonus depreciation, businesses are allowed to write off a greater portion of the purchase price of assets in a single year and on expensive items like airplanes the savings can be significant. "Economists have long recognized that allowing for additional depreciation, in the first year after the purchase of an asset, is an effective way to motivate people and companies to make upgrades," said NBAA President Ed Bolen. "When applied to business aircraft purchase, bonus depreciation gives companies immediate access to the efficiency, productivity, competitiveness and other benefits that come with the assetís use, while also helping to preserve jobs in a key American manufacturing sector."
The measure is part of a package of "tax extenders" proposed in the legislation and would apply to equipment put to use starting Jan. 1, 2014. "Qualified property placed in service during the allotted period would be allowed an additional first-year depreciation deduction equal to 50 percent of its adjusted basis. Property that meets the requirements for the additional first-year depreciation deduction may also qualify for first-year depreciation equal to 100 percent of the qualified propertyís adjusted basis," NBAA said in a news release.